Hinderer earning big cut of knife industry

Rick Hinderer handcrafts his high-end knives at his shop, The Ranch, in Shreve.

Rick Hinderer is a maker who made it big.

Never heard of him? You must not be into knives.

Because if you were, you'd likely know Hinderer. He's become a legend in the large but esoteric subculture of high-end knife users, collectors and connoisseurs.

"Rick is really a star. He's right up there. If not in the top five, he's in the top 10" among the nation's knife designers, said Howard Korn, owner of Knifecenter.com in Virginia.

Korn should know, too. He's also a star in a knife industry that has exploded in recent years.

Korn started as a one-man operation and was one of the first online knife shops in the mid-1990s. Today, he employs 28 people and ships out more than 1,000 knives a day — from cheap $10 imports to pieces made one at a time by master craftspeople that cost thousands of dollars.

Similarly, Hinderer started out as a one-man shop, hired his first employee in 2009 and today employs 15 people in a 14,000-square-foot spot in Shreve, near Wooster, with 18 computer numeric control (CNC) machines, a water-jet cutting station and other equipment.

Dan Shingler for Crain's

A batch of Half Track Flippers, one of Hinderer’s newer designs, nears the end of the assembly process.

He's made knives for Fortune 500 CEOs and celebrities. Hinderer even gets recognized in public himself.

"I was at the airport in San Francisco, and this guy comes up and says, 'Rick Hinderer — I can't believe it!' "

Hinderer couldn't believe it either.

Yep, the knife industry is enjoying a boom. It's no wonder the History Channel has a show called "Forged in Fire" that pits blade makers against one another in a competition that resembles "Iron Chef."

Hinderer and his company, Rick Hinderer Knives, has been not only a participant, but a driver of the trend.

It's been a long road from modest beginnings, though.

"I started in a shed," he said, recalling the first knife he made in 1987.

"I had a good friend who was retiring from the Army special forces, and I wanted to get him a knife as a present. But I didn't have any money, so I figured, I'll make him one. And I hammered a knife out of a plow point."

Those early knives were inexpensive. Hinderer sold his first blade in 1988 for $30, he said. But today his work can fetch thousands.

He hammered out hunting knives and other "users" for a few years. But soon Hinderer, who was already a blacksmith, was drawn to making "art knives" — fancy blades, sometimes made of Damascus steel, with exotic handles. A single piece often would take weeks of work.

The art knives sold for a few hundred dollars when he made them, but today collectors pay thousands for them. Hinderer, who collects his old knives when he can, recently paid $4,500 to get one back.

"I sold it for $300 the first time," he said with a chuckle.

As he progressed, a hammer and forge were no longer good enough, especially when he started making folding knives and other things that required machining.

Hinderer became a self-taught machinist, then taught himself to use CNC equipment. Today, he designs his knives on a CAD system and makes them in a high-tech shop that he opened in 2015.

How did a former horse trainer, blacksmith and farrier go from a shed to a full-staffed machine shop? With good designs, a great product and, Hinderer concedes, a hell of a tailwind.

Innovations in design and the advent of new materials — such as titanium for frames and a seemingly endless succession of new "super steels" for blades — have resulted in knives that are smoother, sleeker, tougher and able to hold an edge like no knives ever made before.

Combine that with a lot of people, mostly men, who have both disposable income and an internet connection, and you've got the recipe for today's knife market.

"It's really a golden age for knife-making," Hinderer said.

Like a lot of knife makers, Hinderer had a design that took him to fame — the XM-18, a folding knife with a variety of blade options that is designed to take a beating while holding an edge. Hinderer has invented improvements to knives along the way and developed new products, like the "tactical pen" that also serves as a self-defense weapon. But he's also made some smart business moves, Korn said. Foremost among them might be Hinderer's collaborations with other knife makers.

Hinderer doesn't make that many knives in his shop, a few thousand a year, he said. But hundreds of thousands of knives are made with his name and design each year, sold by brands like Kershaw, Zero Tolerance, Gerber, Benchmade and others. They are big production companies set up to make many more knives than Hinderer. They may not get the handwork that a knife from Hinderer's shop gets, but they're also much less expensive.

A Hinderer design from Kershaw and made in China might cost you $30 to $50. A Hinderer knife made in the U.S. by Zero Tolerance costs between $150 and $300. A knife from Hinderer's shop costs $425 and up.

If you want one made by Hinderer himself, you can still get one — but that generally will cost you a couple grand.

Those arrangements do a few things for Hinderer. First, he makes money off every knife sold with his name on it. That's hundreds of thousands of knives a year and represents more income than the knives he actually makes, he said.

But more importantly, it's a tiered marketing strategy that allows Hinderer to sell knives to people who would not dream of spending $400 or more on one. And, sometimes, they eventually decide they do want, or can afford, a "real Hinderer."

"You can buy my knives in Walmart," Hinderer said.

The question is, can he keep it up? As the knife industry has become more popular, so has the number of new makers. That includes Chinese makers who also can get hundreds of dollars for their knives and compete for sales with guys like Hinderer.

Knife sales are tough to track. They're usually lumped in with other hand tools. But the American Knife and Tool Institute, an industry advocate group, estimated in 2015 that U.S. knife sales were more than $950 million at the wholesale level, before retail markups were applied. That represents more than 4,700 jobs at 81 companies, it reported. Sales have since decreased a bit, however, and the industry publication Knife News reported in August that 2017 sales were down about 5%, year-to-date, following a similar decrease in 2016.

Korn, however, said he's not seen a slowdown in sales, and he thinks people like Hinderer will do just fine because they have established followings and a reputation for making a quality product.

"We're still a growing enterprise, and the industry is still growing," Korn said. "For the Rick Hinderers of the world, I think there's always going to be room."

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